mg8991 0 Report post Posted April 7, 2019 Hi everyone. First time poster, long time and challenged options trader here. Know the terminologies and way they work fairly well, and also fairly good at using technical indicators to help forsee a lot of what goes on in the future price movement. However, I struggle with risk management, especially as it pertains to options. For the sake of my post, consider a trader with a smaller account than not. Say $10,000 and I'm trading the daily and weekly chart, so planning for moves over the next 2-4 months. My question is how you all feel about stop losses with options, among a couple other things. Since options tend to fluctuate wildly with price action, should I just factor my risk into the purchase at the beginning and let them do what they're gonna do? For example, with a smaller account, say I want to risk 5% or $500 on a trade. Is it better to buy some options outright (or a spread) and just let it be? Follow up to that though is if yes, some cases would make it tricky to get my 3:1 risk reward ratio, or does that theory change given the circumstances too? As for the options themselves..Delta .70 seems to be a common agreement among traders and I've found more success with that, but again note the difficulty to achieve 3:1 that way. What about other tips to picking the options themselves, IV, Prob ITM or Prob Touch...do those really offer a solid edge as far as risk management or is it just noise? Thank you all! Look forward to reading/sharing more ideas within the group! Take care Share this post Link to post Share on other sites
